Housing starts declined sharply in July as elevated construction costs, high financing expenses and economic uncertainty continued to weigh on residential construction.
Overall housing starts fell 12.4% to a seasonally adjusted annual rate of 1.24 million units, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Single-family starts dropped 9.9% to an annualized rate of 808,000 units, down 15.7% from July 2025. Multifamily construction declined 16.8% to a 431,000-unit pace, 8.9% below a year ago.
“Builders remain cautious as elevated mortgage rates, rising construction costs and economic uncertainty continue to limit demand,” said Danushka Nanayakkara-Skillington, NAHB assistant vice president for forecasting and analysis. She noted that the decline in single-family construction is particularly concerning given persistent housing shortages in many markets.
Year to date, combined single-family and multifamily starts were up 11.7% in the Northeast but declined 4.5% in the Midwest, 3% in the South and 3.8% in the West.
One positive sign came from building permits. Overall permits increased 5% in July to an annualized rate of 1.44 million units. Single-family permits rose 2.5% to 894,000 units, while multifamily permits climbed 9.4% to 549,000 units.
NAHB said the improvement in permits could signal stronger construction activity ahead, although affordability, mortgage rates and construction costs remain significant challenges for the housing market.
ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 700 state and local home builders associations around the country. NAHB’s builder members will construct about 80% of the new housing units projected for this year.
